Inca Salsa’s distribution heats up with Hy-Vee, Target, Walmart

Since 2012, Inca Salsa has gone from selling a few cases of its products every month to 1,000.

It recently returned to local Walmart shelves, earned distribution rights with Target and landed a big contract with Hy-Vee Inc.

“We started selling salsa in town as a hobby thing in maybe 2003 or 2004,” said Julio Espino, who owned Inca Mexican Restaurant at the time. “Then we got real serious in 2012.”

Espino turned to Backyard Salsa of Tea to manufacture the products, tweaking the original restaurant recipe for mass production but still using fresh ingredients. He got permission to sell his fresh salsa in one Hy-Vee grocery store in Sioux Falls and eventually expanded to all of them and other businesses in Sioux Falls. Inca Salsa started working with Global Distributing to reach grocery stores in smaller towns in the area, and Espino began to work on the larger contracts with the national retailers.

In the past couple of years, he also expanded his co-packing network to include Grandma D’s Kitchen in Pukwana.

The newest contract with Hy-Vee expands distribution for shelf-stable salsas that don’t have to be refrigerated until they’re opened. A Hy-Vee truck picks up the cases at Backyard Salsa and takes them to one of two central warehouses for distribution to about 200 of the company’s 270 grocery stores in eight states.

“It’s perfect,” Espino said. “It’s a dream way to do business.”

With Target, the sky’s the limit with the agreement, but it’s a logistical hurdle. “We can go anywhere as long as we deliver and stock it,” Espino said. For now, he’s stocking the shelf-stable salsas in the two Sioux Falls stores and will expand that to include the fresh versions.

Walmart also hold the potential for growth, he said. Inca Salsa products had been in the local stores for a couple of years until Walmart introduced new perishable food guidelines. “With that, they took us out until the auditors could review the products. It took eight months to do that.”

Now, Inca Salsa is in the four Sioux Falls stores and Walmarts in Brookings and Mitchell. Espino said he’s talking to other locations in eastern South Dakota about carrying his products.

Espino said Walmart executives told him they love the product, and if it does well, it could be moved into wider distribution in the region within a few years.

“The hard work is done,” he said. “The foundation of the business is done.”

The next step is looking at how to grow the distribution network.

He’s also expanding the product line and is working to bring a hot sauce to market next.